Renewable energy in Vietnam is becoming popular with Thai investors thanks to the government there offering high adder rates (the rate state utilities pay operators) of 9.35 cents, says the Thailand-Vietnam Business Council.
Montri Mahalerkpong, vice-chairman of the council, said the Vietnam government is shifting its energy policy, in particular regarding solar panels, as it aims to promote eco-friendly resources to generate electricity. The country is also concerned with pollution and preserving its environment.
"This is a new opportunity for Thai investors in solar and wind farms, as we are experts in these renewables," he said.
"Investors should seek merger and acquisition deals as they offer benefits faster than starting from scratch on a green field project."
Mr Montri, also vice-chairman of the Federation of Thai Industries (FTI), said the Vietnam government wants to reduce use of coal-fired power plants, which account for 30% of total power capacity.
Vietnam has delayed plans for two nuclear power plants, focusing more on renewable energy.
He said heavy monsoons in Vietnam are a negative factor for operating wind farms there, with the country facing some 20 monsoons per year.
"Thai investors should do their research and conduct feasibility studies carefully to determine weather risk," said Mr Montri.
Vietnam's consumer, food and beverage and retail sectors have become popular investment targets as that country is one of the large markets in Asean with a population of 93 million.
It is also an important country in terms of foreign direct investment (FDI) in the region.
Kreingkrai Thiennukul, an FTI vice-chairman, said Vietnam is expected to become a part of the global supply chain for many multinationals that have invested heavily in that country.
"In 2017, Thailand had trade value with Vietnam of US$15.2 billion, with the export value to Vietnam $10.5 billion, while imports from Vietnam totalled $4 billion," said Mr Kreingkrai.
He said Thailand is the largest trade partner for Vietnam.
The main exports to Vietnam are farm products, consumer products and auto parts.
Tran Thi Thanh My, commercial counselor of the Vietnamese Embassy, said Vietnam's economy has average growth of 6-8% per year, the highest pace in Asean.
Ho Chi Minh City has an FDI value of $287 million from 3,062 projects.
"Vietnam welcomes foreign companies to invest as the government offers many attractive privileges and incentives. Products from Vietnam are of similar standards and quality as Thai products," she said.